Weeks of drought in Argentina caused irreversible damage to corn plants in the world's No. 2 exporter, prompting the Buenos Aires Grains Exchange to cut its 2011/12 crop estimate on Thursday.

The exchange dropped its forecast to 21.3 million tonnes from an earlier 22 million tonnes, saying recent rains that have benefited many parts of the grains belt came too late to help fields hardest hit by December and early January dryness exacerbated by an unforgiving Southern Hemisphere summer sun.

Production of soy, Argentina's main agricultural export, was seen steady at 46.2 million tonnes, the exchange said in a report. Soy has not suffered as much as corn thanks to a longer flowering period that gives plants more time to soak up whatever moisture is available.

Argentina is the world's second-biggest corn exporter after the United States and its No. 3 soybean supplier. As global population grows to an estimated 9 billion by 2050, demand for food will nearly double, according to the United Nations. Argentina will be key to meeting those needs. The U.S. Department of Agriculture said on Thursday the dryness severely stunted South America's corn and soybean crops, although not quite as badly as expected.

Recent rains have ended the drought in most areas of Argentina. "A good part of the agricultural belt, most of all in the central regions, managed to accumulate moisture over the last seven days," the exchange's report said.

"The storm front was extensive and reversed drought conditions in the northern and southern parts of the grains belt, parts of central eastern Entre Rios province, parts of eastern Buenos Aires province and parts of southern and central northern Cordoba," the report said.

"Although the relief is substantial," it added, "it must not be forgotten that there are potential total losses in early-planted corn."

Argentina's main grains area straddles northern Buenos Aires and southern Cordoba, Santa Fe and Entre Rios provinces.

These areas were left panting by December and early January weather related to La Nina, a phenomenon caused by an abnormal cooling of waters in the equatorial Pacific Ocean and that tends to inflict dryness in the Southern Hemisphere. La Nina will likely dissipate in the months ahead, but farmers in the southern United States and South America may have to contend with lingering dryness.

"We expect La Nina impacts to continue even as the episode weakens," the U.S. Climate Prediction Center (CPC) said in its monthly update on Thursday.

(Additional reporting by Maximiliano Rizzi and Maximilian Heath; Editing by Lisa Shumaker)